Rocket Internet Merges Five Fashion Brands Into One Worth $3.5 Billion
The Berlin-based startup incubator, Rocket Internet, has announced its latest venture: consolidation of five of the fashion brands, that it has sowed in the emerging markets, into one brand, which will have a combined valuation of $3.5 billion. It is expected to close the deal by end of this year.
The companies being merged, to be called Global Fashion Group (GFG), are:
- Dafiti (Latin America)
- Jabong (India)
- Lamoda (Russia and CIS)
- Namshi (Middle East)
- Zalora (South East Asia and Australia)
Furthermore, Rocket Internet has said that all direct and indirect shareholders in the five companies will contribute their shares into GFG, where the three largest shareholders will be Kinnevik (25.1%), Rocket (23.5%) and Access Industries (7.4%).
“GFG will be focused on capturing the massive growth opportunity of fashion e-commerce in emerging markets,” said Oliver Samwer, CEO of Rocket Internet, in a statement. “Each of the business units will be able to build on the original Rocket platform and continue to leverage knowledge and expertise gained across 23 countries. I look forward to working with our founders in accelerating GFG’s growth profile and development even further.”
Rocket Internet has been mainly focused on developing markets which are less saturated in usage and competition, consisting of consumers who have recently come online. This fresh batch of consumers means there is big opportunity of faster growth for the companies, as big as the fashion market being valued at €330 million, while covering 23 countries.
Rocket Internet works with basically the same recipe: a mix of long lasting products, global favorites, and products made according to the local market needs, with a matching variety of brands. Similarly, GFG will continue in the same fashion, with the individual brands remaining intact. The company said in a statement:
GFG will maintain multiple business models including full inventory, branded shops and marketplaces tailored to the opportunities within the local markets. In addition, GFG will continue to explore the development of adjacent categories like personal care. Mobile commerce will remain a core focus for GFG through the continued development of mobile applications aimed at the growing smartphone user base in its territories.
As of June 30 2014, GFG had 4.6 million active customers with 353m unique visitors and over 7,000 employees. During the first six months of 2014, GFG received 8.4m orders and generated €436m of Gross Merchandise Volume, and has €350 million of cash as of 30 June 2014.
The Board of Directors of GFG will include Lorenzo Grabau, CEO of Kinnevik as Chairman, Oliver Samwer, CEO of Rocket as Deputy Chairman and representatives of the other largest shareholders.
“The creation of GFG brings together five powerful digital brands led by a unique group of highly talented founders and managers. By operating as a single entity, Dafiti, Jabong, Lamoda, Namshi and Zalora will be even more effective in expanding their leadership positions in their respective marketplaces,” said Lorenzo Grabau, CEO Kinnevik, in a statement.